Weekly Sharing 20 May 2024

US Stock Market Review 13 - 17 May 2024

$Dow Jones Industrial Average(.DJI.US)$ +1.24%, $S&P 500 Index(.SPX.US)$+1.54%, $Nasdaq Composite Index(.IXIC.US)$+2.12%. DJIclosed above the key 40,000 level for the first time ever.

Major economic data last week, CPI and retail sales showed weaker than expected result, ignited speculations that the economy is cooling, elevating chances for the Fed to cut rates in the next few months

Over 90% of the $S&P 500 Index(.SPX.US)$ companies having reported, average Q1 EPS growth stands at 7.3%, which is the second-highest rate in two years

Event to watch: 22 May $NVIDIA(NVDA.US)$ QR, 23 May FOMC Meeting Minutes, Jobless Claims, S&P PMI

MY Stock Market Review 13 - 17 May 2024

$FTSE Bursa Malaysia KLCI Index(.KLSE.MY)$+1%, highest since March 2022, mainly contributed by $YTL(4677.MY)$ & $YTLPOWR(6742.MY)$ and US rate cut hopes boosted global sentiment

The 4.2% year-on-year growth of GDP for the first quarter, announced by BNM on last Friday, was higher than the estimate of 3.9% growth

Technology sector as the top mover! The index gain more than 7% last week and hit 2 year high on the back of rally in the Nasdaq sparked by Bank of America’s ratings upgrade of Apple and positive earnings results from TSMC, furthermore supported by US tariffs hike on China imports. The second best sector performer to be healthcare, nearly 6% of gains last week at a 2-year high too.

Event to watch: 20 May Balance of Trade, 24 May Inflation Rate

Theme of the Week

Impact of US Tariffs Hike on Chinese Electric Vehicles (EV) to Malaysian Stock Market

Last week, US President Joe Biden ramped up tariffs on Chinese imports, which include a 100% border tax on EV, as a response to unfair policies and intended to protect US jobs.

Will this action directly or indirectly benefit Malaysian EV related stocks? First, let’s understand how is the EV’s sales are and how big the EV industry is in Malaysia.

EV Sales in Malaysia Year 2021 - 2023 Compared to Hybrid and Petrol/Diesel Vehicles

Data Source: Malaysian Automotive Association (MAA)

From the graph above, there is a huge space to grow for EV in Malaysia to catch up other type of vehicles and the sales growth from year 2021 to year 2023 was tremendous.

EV Industry in Malaysia

The supply chain of EV in Malaysia encompassed many sectors from manufacturing and assembly to semiconductor, components, batteries, charging station and distributorship.

Some examples of Malaysian stocks that are related to the sectors mentioned above:

1. $D&O(7204.MY)$

2. $GREATEC(0208.MY)$

3. $PENTA(7160.MY)$

4. $MPI(3867.MY)$

5. $PESTECH(5219.MY)$

6. $KESM(9334.MY)$

7. $TENAGA(5347.MY)$

8. $GENETEC(0104.MY)$

9. $EPMB(7773.MY)$

Opportunities of Malaysian EV Industry

More support from government and private sector to be in line with National Energy Transition Roadmap (NETR), which will develop EV industry by having more infrastructure, career opportunities and research & development (R&D)

More EV players from local and overseas. Besides BYD, BMW and Tesla, there will be more foreign EV markers tapping into Malaysian market like XPENG, too with potential local EV models from Perodua

Development of EV supply chain in Malaysia, making Malaysia the EV powerhouse in southeast Asia. In year 2023, Malaysia’s first energy efficient vehicle (EEV) and electric vehicle (EV) manufacturing plant is set to be built in the HICOM Pegoh Industrial Park in Melaka with an investment value exceeding RM100 million.

Source: Tenaga Nasional Berhad (TNB)

Conclusion

With or without US tariffs hike on Chinese EV, Malaysian EV industry is growing with the support of many catalysts. Will a strong bull trend incoming for Malaysian EV related stocks? Let’s keep an eye on them!

Disclaimer
This content is for reference only and does not constitute any investment advice, and past performance is not indicative of future performance. Returns will vary, and all investments carry risks, including loss of principal. Please make your own investment decisions.

In today’s hands-on video, timed to coincide with the release of the U.S. 13F report, I want to share with you how to track institutional positions and watch the big boys do their homework.

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In the end, I will share more market trends and investment knowledge in the official Learning group organized by the moomoo Education Team @Invest With Cici. Everyone is welcome to join.